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Wind energy has experienced dramatic growth over the past decade. A small fraction of this growth has occurred offshore, but as the best wind resources become developed onshore, there is increasing interest in the development of offshore winds. Like any form of power production, offshore wind energy has both positive and negative impacts. The potential negative impacts have stimulated a great deal of opposition to the first offshore wind power proposals in the U.S. and have delayed the development of the first offshore wind farm in the U.S. Here we discuss the costs and benefits of offshore wind relative to onshore wind power and conventional electricity production. We review cost estimates for offshore wind power and compare these to estimates for onshore wind and conventional power. We develop empirical cost functions for offshore wind based on publicly reported projects from 2000 to 2008, and describe the limitations of the analysis. We use this analysis to inform a discussion of the tradeoffs between conventional, onshore and offshore wind energy usage.